Oil prices experienced a decline of nearly 2% on Wednesday, as reports indicated that OPEC+ might expedite its planned increases in oil production next month. However, the declines were somewhat restrained following news that U.S. President Donald Trump could potentially reduce tariffs on imports from China.
As of 10:39 a.m. EDT (1439 GMT), Brent crude futures had fallen by $1.14, or 1.69%, to $66.30, while U.S. West Texas Intermediate crude decreased by $1.17, or 1.84%, to $62.50. Earlier in the session, Brent had peaked at $68.65 per barrel, its highest rate since April.
According to three sources with knowledge of the discussions, several members of OPEC+ are set to propose a continuation of the output increases for the second month in June. This decision comes amid ongoing disputes among members regarding adherence to production quotas. Following this news, both benchmark prices dropped more than $2.
In a related development, Kazakhstan’s newly appointed energy minister stated that the nation would prioritize its own interests over those of the OPEC+ group when determining its oil production levels. Kazakhstan has previously faced discontent from other OPEC+ members due to its decision to output beyond its allocated quota.
The Energy Information Administration reported an increase in U.S. crude inventories, while gasoline and distillate stockpiles saw unexpectedly large decreases last week. Crude stocks increased by 244,000 barrels to reach 443.1 million barrels for the week ending on April 18, contrary to analysts’ expectations for a reduction of 770,000 barrels according to a Reuters poll.
Additionally, the U.S. government is contemplating reducing tariffs on Chinese imports in an effort to alleviate tensions with Beijing, as reported by the Wall Street Journal. It’s suggested that the tariffs may drop to between 50% and 65%.
Moreover, the U.S. has implemented new sanctions against an Iranian shipping tycoon associated with networks involved in managing liquefied petroleum gas and crude oil transactions valued at hundreds of millions of dollars.
Trump has also softened his stance on potentially dismissing Federal Reserve Chair Jerome Powell after several days of public criticism of the Fed for not lowering interest rates, which has relieved some investor concerns regarding economic stability.